When it comes to the oil industry, when it comes to generating wealth there is one name that stands above all, John D. Rockefeller. Many people think that Jeff Bezos, Bill Gates, Elon Musk, and Warren Buffett these guys are the richest in history. But John D. Rockefeller amassed a fortune that was worth all of these guys’ wealth combined how through building a trillion-dollar oil empire Standard Oil.
- In 1859 America’s first oil well was established. By the early 1860s, the oil industry was booming. But Rockefeller was smart. Instead of trying to drill up the oil he established something called an ‘oil refinery’. As Rockefeller famously said,
“If you want to succeed you should strike out on new paths rather than travel the warm paths of accepted success”
John D. Rockefeller
The Beginning
- So he would get the leftover oil & transform it into more useful products like lubricants, paraffin wax, paints & other valuable items. How the money coming in from this oil refinery started looking very good. So he built another oil refinery. Very soon he would own the world’s largest refinery business & have multiple buildings throughout the Cleveland area.
- After seeing Rockefeller’s success others also started to build their own oil refinery business. Rockefeller was not happy about this. He wanted to dominate the entire industry. So, throughout the country, he bought many oil refineries that he could get his hands on. Within 2 years the majority of Cleveland’s refineries belong to Standard Oil.
- But some competitors refused his offers. He would buy up all the oil barrels to cause a shortage. He would keep the prices of his products so low that even he would make it a loss. This way all customers would come to buy his products & not competitors. Eventually, the competition just did not have the finances to keep up with Rockefeller’s. then all other small oi; refineries bought by Rockefeller.
The Empire
- Because Rockefeller was just so skilled at business & making processes efficient Standard Oil was doing well. They now had control of 90% of the domestic oil market & they gave employment to over 100,000 Americans. Standard Oil became a compelling company. Some journalists and politicians said that Standard Oil had too much power & they fought against Rockefeller. But Rockefeller quoted that,
“In a business so large as ours some things are likely to be done which we cannot approve. We correct them as soon as they come to our knowledge”
John D. Rockefeller
- Around this time Rockefeller started to merge his all companies into one big empire. Giving birth to the Standard Oil trust. This trust had all 41 companies underneath it & Rockefeller now had his oil empire in one centralized place. It had become the richest, biggest & most feared business in the world. Rockefeller’s empire now included 20.000 domestic wells, 4,000 miles of pipeline & 5,000 tank cars.
Standard Oil
- If Standard Oil existed today it would be worth over 1 trillion dollars & Rockefeller is the richest person on the Earth with a net worth of 400 billion dollars. But Rockefeller was always a man with a big vision. He wanted to expand into iron ore & ore transportation. This forced a collision with the steel king Andrew Carnegie.
- Rockefeller started his business in the steel world & Andrew Carnegie was not happy about that. Carnegie offered to buy all his iron plants & Rockefeller agreed to his offer & made a lot of money.
- Because Rockefeller’s company was so big it was being increasingly attacked by the public. Eventually, they got taken to the Supreme Court where it was ruled Standard Oil company of New Jersey violated the Sherman Antitrust Act. The court ruled that the trust originated in illegal monopoly practices & ordered it to be broken up into 34 new companies. These companies are known today as Chevron, Exxon, Mobil, and Conoco.
